Tag Archives: The Rich Get Richer Whilst The Poor Struggle

This is the clearest explanation I’ve heard regarding the debt crisis and the credit bottleneck that is stifling the world’s economy.

Helga is the proprietor of a bar. She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar. To solve this problem she comes up with a new marketing plan that allows her customers to drink now , but pay later.

Helga keeps track of the drinks consumed on a ledger (thereby granting the customers’ loans).

Word gets around about Helga’s “drink now, pay later” marketing strategy and, as a result, increasing numbers of customers flood into Helga’s bar. Soon she has the largest sales volume for any bar in town.

By providing her customers freedom from immediate payment demands Helga gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer – the most consumed beverages.

Consequently, Helga’s gross sales volumes and paper profits increase massively. A young and dynamic vice-president at the local bank recognises that these customer debts constitute valuable future assets and increases Helga’s borrowing limit. He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral.

He is rewarded with a six figure bonus.

At the bank’s corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into DRINKBONDS. These “securities” are then bundled and traded on international securities markets.

Naive investors don’t really understand that the securities being sold to them as “AA Secured Bonds” are really debts of unemployed alcoholics. Nevertheless, the bond prices continuously climb and the securities soon become the hottest-selling items for some of the nation’s leading brokerage houses

The traders all receive a six figure bonus.

One day, even though the bond prices are still climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Helga’s bar. He so informs Helga. Helga then demands payment from her alcoholic patrons but, being unemployed alcoholics, they cannot pay back their drinking debts. Since Helga cannot fulfil her loan obligations she is forced into bankruptcy. The bar closes and Helga’s 11 employees lose their jobs.

Overnight, DRINKBOND prices drop by 90%. The collapsed bond asset value destroys the bank’s liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community.

The suppliers of Helga’s bar had granted her generous payment extensions and had invested their firms’ pension funds in the BOND securities. They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds. Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations; her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.

Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multibillion dollar no-strings attached cash infusion from the government.

They all receive six a figure bonus.

The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who’ve never been in Helga’s bar.

After reading my friends’ blog posts, I am absolutely furious. ANOTHER RADIO 4 RANT , where she vents quite rightly about a radio program where a “panel” reckoned money cannot buy you happiness, ( yeah right, THEY I am sure don’t have to choose between food and heat each week), and her follow-up one here …. I FEEL LIKE I AM SWIMMING IN CUSTARD , where she describes a situation I am sure most of us will sympathise with right now, no matter how thrifty you are or how many extra layers you put on, you cannot win. The more you “save” or skimp on, the higher the costs for the little you do use go!

How DARE the UK Government keep bleating on one hand that “we are all in this together”, when we blatantly are NOT. The bills for THEIR multiple homes are paid for BY US. They say we all have to tighten our belts, it’s all for our own good in the long-term, etc. If that is the case, then why oh why are we STILL donating mega amounts of cash abroad? I was always taught that charity begins at home, the British public is extremely charitable when we need to be, all on our own, we do NOT need to be forced into it. IF we are all feeling a bit more wealthy, then no doubt we will donate more, ALL BY OURSELVES.

And I am SO sick of the greedy utility companies constantly bleating about their rising wholesale costs, repair bills, taxes, you name it, they invent it, then seeing their quarterly PROFIT statements rising ever higher. Now correct me if I am wrong here, but aren’t profits listed AFTER outgoings?

And if all these so-called “Green” taxes are supposed to be helping our environment, then what exactly are they being spent on?

Is there some huge “air cleaning machine” somewhere out there that we don’t know about yet?

And please, don’t anyone dare tell me it goes on alternative energy, because with all the subsidies that those companies get paid they are NOT real alternatives they are more profit-making (and environment destroying) devices.

It really wouldn’t surprise me in the slightest if it comes out in a few years time that all these so-called “green” government ministers also had huge shareholds in these “wonderful” new schemes that we are forced to pay for whilst we go without heating, lights, and in far too many cases these days, food!

Do these suited, well-heeled clowns actually KNOW or care that our own old folk, many of whom fought for our country in years gone by, will most likely die this winter, AGAIN?

Do they know or care that far too many people who are already on the bread-line will simply get forgotten and end up on the streets, purely because their meagre incomes cannot keep up with the rising costs?

Don’t get me wrong, I am all for fair taxes and paying our way BUT PLEASE politicians, you are leaching the lifeblood from our country mainly from those who do the hardest work and can ill afford the relentless hits!

Going back to my friends’ post on the radio show, yes, I am afraid money CAN buy you happiness, it can sure take the stress out of everyday life, allow for a few treats like a hot meal now and then, and make you feel secure, if only in your home and basic living standards, but hey, isn’t that something else our government keeps insisting on as well, somewhat contradictorially? Eat well, live well?

Let us keep just a little bit more of our hard-earned and maybe, just maybe, we will be able to do just that!

I am sitting here watching the news in a near state of total disbelief.

It has ended with the news that our “beloved” government is actually going to put people’s lives at risk and go ahead with the closure of eight key-placed and much-needed Coastguard Stations around the UK ( news here )

They also intend on repeating the same mistakes they made at OUR expense with the centralised Fire and Police Control Centres, that got built, furnished then abandoned after MILLIONS was wasted on them, by doing the same thing all over again with the Coastguard service.

I wonder if they’d be so quick to do this if they didn’t have the salary/back-up for THEIR family should they need it?

What has incensed me beyond measure was the first part of the news… with reference to this self-same government wanting even MORE money from our pockets (news here) for themselves.

Apparently, having more than a decent salary each, and being able to claim for even a kitchen sink on their expenses sheets on top of their wages, not to mention all those tasty kick-backs ( just read anything on the climate/so-called Green energy debates HERE ) simply isn’t enough for them anymore.

Once upon a time I honestly believed that MP’s were there to serve the people who voted for them, who actually cared about their country and wanted to make a difference. This was some time ago. From what I have seen in the last 30 odd years, they simply wish to line their own pockets in any way they can. Do any of them care that tonight for instance, due to the ridiculously rising costs of household utilities, not to mention food prices, I actually had to choose NOT to have a hot meal?

My money goes on the rent once a week, and what is left gets divided into 7 equal portions, then each day’s worth gets broken down again into gas, water, electricity, food etc.

There was nothing reduced in any of the five supermarkets I walked around today, over a period of 3 hours, ( there are so few where I am), and for me to have paid “full-price” for anything edible, it would have meant not enough change left over with which to cook whatever I had chosen!

Yes, I am one of the lower end of the scale, but HELLO Dear Government, there is an ever-increasing number of folks just like me out there, we actually DO try to do our bit, and STILL get financially stamped on every time one of you makes a grand decision over your glass of champagne in your fancy restaurant.

Maybe if we didn’t collectively have to pay so much for YOUR lifestyles, we’d actually be able to get by!

With the other recent news regarding the so-called Industry Fat Cats getting huge salaries, I cannot help thinking we’d all be better off in the UK if we fired ALL government ministers and simply hired the best brains in industry to run the various departments instead!

Yet another excellent post on what will I suspect turn out to be a “burning” issue here in the UK. If you are not already following this guy then you really should consider it.

Before I continue, let me remind anyone who knows me that I am just a simple aged mom who in a past life had a “career” in a british engineering discipline, back in the day when the UK actually HAD an industry, and now long for the simpler things in life, I have an appreciation of trying to be as green in my day to day living as I can, and a strong interest in all things earthquake, volcanic and natural to our planet.

With regards to this fracking film ( I am finding it somewhat hard to use the term “fracking” in front of any word without laughing a little), I too watched with a degree of horror, and decided to do a little research of my own, in my own way.

Do consider these points that I raised with myself over this issue:

1. Which would you prefer beneath your feet….a huge cavern or patch of methane-soaked spongy rock layer that could easily explode with any tiny seismic movement by way of naturally occurring flint in the shale layers striking against another piece of flint?
Or the same filled with safe water that actually helps to stabilise the area better?
Removing the gas and refilling the void areas with water would take this remote risk away completely, also I believe the ground would become more stable as water is denser than gas.

2. Most films use a degree of artistic licence in order to make it a gripping movie, and thus a film made to generate money should never be used as a definitive guide to what is actually happening in the world, although granted some are great starting points for raising awareness of a particular subject.

3. “Fracking causes earthquakes blah blah” Ask yourself this: did early coal mining cause earthquakes?
For this they invented the Davy Lamp, to prevent underground natural gas emission explosions, which must have been occurring on a regular enough basis to convince someone that a safer way of lighting the path in the tunnels was needed, were any earthquakes caused during these early explorations underground?

Also, were any earthquakes actually triggered by the blasting of quarries for stone, hillsides for road, rail and canal building?

4. How many of these politicians have a “vested interest” in so-called Green Energy……….this is something that is really starting to worry me, I realise that they legally supposedly cannot be “attached” whilst they are in power, but how much do we really know about the deals they have struck in readiness for the time when they leave their political positions and thus have time on their hands to sign directorship agreements elsewhere?

As if enough fiction has not already been published by the Church of Climatology on man made Climate Change, now there is to be a concerted drive to spread climate fear stories by fiction. A new collection of climate change fictio … Read More